A special needs trust is a legal arrangement that permits a third party to establish a trust to benefit a family member or friend with a disability and other special needs. Also called special treatment or special purpose trusts, they are designed to benefit someone who is receiving Medicaid or other forms of long-term care.
To ensure secure data storage online, we will discuss the different types of special needs trusts:
- First-Party Special Needs Trust
This type of special-purpose trust is ideal for Medicaid applicants or beneficiaries with excess assets or resources. Also referred to as self-settled trusts, this type of trust is used to manage a large number of funds received from a court settlement or inheritance. If you plan on using services that offer estate planning storage to create a first-party special needs trust, keep in mind that the assets in this trust may only be used by the Medicaid beneficiary.
- Third-Party Special Needs Trust
Unlike the previously mentioned trust, third-party special needs trusts are created using the assets of family members or friends. If you plan to store digital assets and utilize this type of trust, bear in mind that the beneficiary does not have direct access to the trust fund since the assets belong to someone else.
- Pooled Trust
Pooled trusts are generally operated by non-profit organizations comprised of resources from several Medicaid beneficiaries. Upon the Medicaid beneficiary’s passing, the state is entitled to reimbursement for expenses paid on the beneficiary’s behalf while the remaining amount is distributed between the charitable organization that created the trust.
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